What is a limited liability company?

A limited liability company, or LLC, is a business entity created under state law that combines characteristics of both a corporation and a partnership. Like a corporation, the owners of an LLC are generally not personally liable for company debts. Like a sole proprietorship or a partnership, an LLC has operating flexibility and is, by default, a "pass through" entity for tax purposes. This means that the LLC does not pay taxes on its profits, but instead, profits and losses are "passed through" to the owners, who must then pay tax on their share of LLC income.

What are the main differences between an LLC and S-corporation?

Although an S corporation shares many of the same tax characteristics as an LLC, an LLC has more flexibility and fewer restrictions on ownership than does an S corporation. An S corporation must not have more than 100 shareholders, all of whom must be U.S. citizens or legal residents. An S corporation is also subject to more formalities, such as holding annual meetings and keeping corporate minutes. On the other hand, LLCs generally are not required to hold formal meetings, but an LLC owner may be subject to higher self-employment taxes than a comparable S corporation owner. That is because an S corporation owner is required to pay self-employment tax only on salary, but not on dividends from the corporation.

Does an LLC need to hold formal meetings?

The answer is usually no, unless the LLC's operating agreement requires meetings. The LegalZoom operating agreements make meetings optional. This is one of the key advantages of an LLC - fewer formalities. This means less paperwork and less chance that the members will accidentally violate the law and possibly lose their liability protection.

Our documents have beenaccepted by courts and governmentagencies in all 50 states.

Forming an LLC with LegalZoom

Accuracy is important when starting an LLC – that is why we guarantee your LLC documents are filed correctly.
Our three step LLC formation process was developed by top attorneys who understand the process of creating an LLC.
The process begins with a quick LLC questionnaire to determine important details about your business.
After you've answered a few questions, your documents are created and filed with the Secretary of State.
Once we receive your filed Articles of Organization back from the state, we send them to you along with the rest of your LLC formation documents, as well as easy instructions regarding the next steps.
It's as simple as that. In just three easy steps, you have begun protecting yourself from personal liability and you're ready to get the word out about your business.
Get the peace of mind you need when starting a business by letting LegalZoom take care of the details while you focus on the parts of your business that matter to you the most.

*Available in most states. After the 30-day trial period, benefits to the Business Legal Plan (also Business Advantage Pro) continue automatically for $29.99 per month. For states where Business Advantage Pro is not available, benefits to Business Advantage Standard continue automatically for $7.99. You can cancel by calling (877) 818-8787. For full details, see the Legal Plan Contract and Advantage Terms of Service.